Windows pricing begins to buckle

Cheapo, crippled XP for Asia

Faced with the popularity of low-cost open source alternatives, Microsoft will launch a cut-price version of Windows XP in five Asian countries, priced at $36.

Windows XP "Starter Edition" is limited to running only three applications at once and will appear in five countries including Thailand, Malaysia and Singapore in October. Microsoft has yet to decide whether to make the move in the two largest markets, China and India, both of which have strong government-backed Linux initiatives.

Microsoft set the $36 price last year for Windows XP in Thailand, in response to a wildly successful scheme that encouraged users to buy cheap PCs. However pirate copies of Windows and Office can be obtained for $4.

Is three applications a hindrance? If one is a combined mail client and browser, another an IM application, and the third a music player, then that covers most of what home users do with their PCs most of the time. Although the true cost of consumer Windows is hidden by Microsoft's OEM agreements, there can be few OEMs, mindful of tight margins, who wouldn't mind pocketing the $50-odd difference between XP Home and XP Starter Edition themselves. ®